International carriers eyeing transfer to NAIA-3

BusinessWorld

MANILA, Philippines - Local airlines operating at Terminal 3 of the Ninoy Aquino International Airport (NAIA) may soon find themselves with more company as international airlines have expressed interest in moving their operations to the newer international terminal.

Tirso G. Serrano, Manila International Airport Authority (MIAA) assistant general manager, told reporters yesterday that four international air carriers plan to operate in NAIA-3 after the legal battle over the terminal is resolved.

The move, however, could mean airlines currently operating in terminal would have to move some flights out.

“This complex issue is being addressed not only in the short term, but also the medium term, and on a strategic long-term basis. Splitting up some operations is a possibility,” said Mr. Serrano.

Because there could be an increase in air traffic and a need to service other carriers, a compromise must be made, he added.

Only 3 local carriers -- budget airline Cebu Air, Inc. or Cebu Pacific of the Gokongwei conglomerate and two Lucio C. Tan-led carriers, Air Philippines Corp. and the budget brand of Philippine Airlines, Inc., PAL Express, operate at NAIA-3. The airlines could not be immediately reached for a comment.

The MIAA, the state-led Manila airport operator, would not disclose the airlines which have expressed interest to shift to NAIA-3.

After being mothballed for six years, the terminal finally opened in 2008 after a Malacañang task force found a legal “loophole.” The courts had allowed the government to take over NAIA-3 but the state is barred from exercising “acts of ownership” until the firm that built the terminal, Philippine International Terminals Co. (Piatco), is fully compensated.

The government expropriated the terminal in December 2004 to hasten its opening, amid protests from Piatco and German partner Fraport AG. A Supreme Court ruling had declared the contract to build it illegal due to corruption allegations.

The NAIA-3 task force had announced that 2008 opening would just be a “dry run,” with earnings from operations going to an escrow account until all legal issues are resolved. The government made a downpayment of P3.2 billion to Piatco after filing the expropriation case in a Pasay trial court.

Mr. Serrano said there could be resistance on the part of the local airlines should other carriers come in.

“Airlines as a matter of practice would prefer to operate all services under one roof due to cost considerations,” said Mr. Serrano.

An example is Philippine Airlines, which operates entirely within the NAIA Terminal 2 or the Centennial Terminal.

Due to the legal issues surrounding NAIA-3, contracts for the use of the terminal have to be renewed every 6 months.

The government moved to take control of the terminal after the Supreme Court, in 2003, voided the build-operate-transfer contract with Piatco. Senate probes had pointed to irregularities and Malacañang itself had declared that the deal, hatched in 1997, was tainted by kickbacks and overpricing.

Portions of NAIA-3’s ceilings collapsed at least 3 times, in March 2006 and August and September 2008.